I generally let speculations ride until there’s a good reason to sell them, but with larger positions I can occasionally take my cues from the market and sell a portion if I have gains to lock in or a substantial stake to protect — so today, with the news out from Africa Oil (AOI.V in Canada, AOIFF on the pink sheets) about some disappointing drilling results in Kenya and an overall tepid annual report, and with investors clearly nonplussed by that report, I sold about a quarter of my position. If you’re keeping track, that means I’ve now taken profits on half of my AOI holdings since my original purchase a little over two years ago. And no, I didn’t catch the peak on any of those sales.
I still think AOI has a pretty admirable asset base, and though they’ve never made it into our Irregulars spreadsheets or been an “Idea of the Month” I have said positive things to you about them as recently as last Fall, when the shares were in the same neighborhood as they are now. But with uncertainty fairly high as Africa Oil continues to proceed with more drilling, and with future development plans and partnerships that would have them grow into an oil producer (instead of selling out to Tullow or another partner), and with “big oil” generally not throwing money around like drunken sailors anymore in their search for new reserves, I felt inclined to reduce my stake. It is still a substantial holding for me, just barely in my personal top ten individual equity positions, but it’s no longer among my largest few holdings.